Dollar Slips Along With Equities

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Dollar Slips Along With Equities

APRIL 12, 2021

The U.S. dollar and global equities retreated in tandem to start the week. 

Overview

It appears traders across asset classes are in a holding pattern ahead of a slew of events this week.  Earning’s season kicks off with the S&P sitting at record highs, the U.S. government will sell 3, 10, and 30-year Treasuries later today, and consumer inflation data is due out tomorrow.  The Blomberg Dollar Index is now at a two-week low.

Fed President Jay Powell appeared on 60 minutes last night and maintained his rosy stance saying the “outlook has brightened substantially.”  On Thursday, the Fed chief also tried to tamp down fears of accelerating inflation pressures.  However, the producer price index released Friday showed prices nearly doubled expectations.  The Consumer price index will be released tomorrow morning and watched with great interest.

The docket today is fairly light with only the March budget statement out at 2 p.m.  The Fed’s Eric Rosengren will speak later today.


What to Watch Today…

  • US Treasury Auction 

View Economic Calendar

EUR  

The Euro is a touch stronger against the U.S. dollar this morning, but you would be excused for not noticing much of a difference.  The common currency was bolstered by economic data that showed euro-area retail sales rose 3.0% in February, beating estimates of a 1.7% gain.

EUR/USD rose to a two-week high late last week.  It is likely that today’s American bond sales and tomorrow’s CPI figures will dictate the direction of the pair for the rest of the week.

CAD  

The Canadian dollar is softer this morning, falling alongside equities.  The loonie has been unable to take advantage of the pop in the price of oil. Later this morning the Bank of Canada will release its business outlook survey.

Despite the slight sell-off in the Canadian dollar to start the week, the loonie continues to hold most of its gains from Friday following a better-than-expected jobs number.  Indeed, the Canadian dollar is still half a percent stronger from Wednesday’s close.

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